PARIS (AFP) — The leaders of Europe's four biggest economies -- Britain, France, Germany and Italy -- will meet Saturday, Paris announced, amid confusion over how to respond to the global financial crisis.
President Nicolas Sarkozy's office said the summit would help European members of the Group of Seven developed nations coordinate positions before next week's meeting of their finance ministers in Washington.
But the build-up to the Paris talks has already revealed a lack of coordination between European powers on how to protect the banking sector, with Germany dismissing calls for a joint European fund to bail out failing banks.
On Thursday, France angrily denied that it had ever suggested such a plan, as had been claimed Wednesday by a European official in Berlin.
Sarkozy himself insisted to reporters that France had not suggested creating a 300-billion-euro (417-billion-dollar) fund,and the finance ministry insisted that both the figure and the idea had come from the Netherlands.
"There was an exchange of ideas but no French proposals. There was no French plan. There is no French fund," said an official in Finance Minister Christine Lagarde's office, denying these "groundless accusations".
On a visit to Paris, Dutch Prime Minister Jan Peter Balkenende denied that his government was proposing a single Europe-wide bail-out fund, saying that there had been a "misunderstanding" on the issue.
Instead, he said, countries should agree on a common strategy to set aside three percent of their gross national product to aid faltering capital markets.
"What we need to avoid is for everyone to have a purely national response. That's the danger at the moment," he said, pleading for a common European position after meeting Sarkozy.
British Prime Minister Gordon Brown's office confirmed he would attend Saturday's summit but stressed that many of the issues emerging from the financial crisis were best dealt with at a national level.
"It is right that individual countries would want to take their own decisions, particularly when national taxpayers' money is potentially at risk," Brown's spokesman said in London.
"President Sarkozy confirmed to the prime minister that it was not the case that the French were proposing a Europe-wide bailout," he added.
Many media commentators blamed France for the confusion, suggesting Sarkozy was so keen to take credit for leading Europe's response to the crisis that he had forged ahead with summit plans without consulting his partners.
Sarkozy has invited Brown, Germany's Chancellor Angela Merkel and Italian Prime Minister Silvio Berlusconi to Paris.
European Commission president Jose Manuel Barroso, European Central Bank chief Jean-Claude Trichet and the head of the eurogroup finance ministers' committee, Jean-Claude Juncker, will also attend.
Paris has been keen to develop a European response to the crisis, which began when US banks found themselves dangerously exposed to bad debt and then spread round the world as credit markets choked up.
France's European partners have so far preferred unilateral and bilateral measures to protect their institutions and are looking forward to the G7 meeting of finance ministers in Washington next week.
On Wednesday, the German finance ministry dismissed talk of a joint bail-out fund. "Germany does not think much of such a plan," spokesman Torsten Albig told AFP.
Irish lawmakers meanwhile passed a controversial emergency law guaranteeing bank deposits despite protests that the move gives its financial sector a competitive advantage over neighbouring countries.
Britain in particular has argued that the guarantee, covering Ireland's six main banks, is unfair amid fears that savings in British banks could be taken out and put into Irish accounts.
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